DEPRECIATION POLICY [Document subtitle] Group Members (Group 1 FA, Sec A): ▪ ▪ ▪ ▪ ▪ DEPRECIATION POLICY FROM THE ANNUAL REPORT Bharat Banzal: EPGP 12A - 030 Sathyan Mahadevan: EPGP 12A - 101 Shilpa Jani: EPGP 12A - 104 Sudipto Roy: EPGP 12A - 111 Vishalkumar Yogeshkumar Joshi: EPGP 12A - 130 Depreciation Policy Period: FY 2018 - 2019 Prepared By: Group 1, Sec A, EPGP 12, FA Assignment 2 Faculty : Prof. Sudershan Kuntluru Effective Date: 02/18/2020 TATA CONSULTANCY SERVICES LIMITED Policy: The company will depreciate its assets (as per the capitalization policy) in a straight-line method, according to a detailed schedule maintained by the Finance Controller’s Office. Presented below is a listing of the depreciation schedule for the relevant items: Details: Depreciation is provided for property, plant and equipment on a “Straight Line” basis so as to expense the cost less residual value over their estimated useful lives based on a technical evaluation. The estimated useful lives and residual values are reviewed at the end of each reporting period, with the effect of any change in estimate accounted for on a prospective basis. Property, plant and equipment are stated at cost comprising of purchase price and any initial directly attributable cost of bringing the asset to its working condition for its intended use, less accumulated depreciation (other than freehold land) and impairment loss, if any. The estimated useful lives are as mentioned below: Type of Asset Useful Lives Buildings 20 Years Leasehold Improvements Lease Term Plant and Equipment 10 Years Computer Equipment 04 Years Vehicles 04 Years Office Equipment 05 Years Electrical Installations 10 Years Furniture and Fixtures 05 Years Assets held under finance lease are depreciated over the shorter of the lease term and their useful lives. Depreciation is not recorded on capital work-in-progress until construction and installation are complete and the asset is ready for its intended use. Intangible assets purchased including acquired in business combination, are measured at cost as at the date of acquisition, as applicable, less accumulated amortization and accumulated impairment, if any. Intangible assets are amortized on a “Straight Line” basis over the period of its economic useful life. Intangible assets consist of acquired contract rights, rights under licensing agreement and software licenses and customer-related intangibles. Type of Asset (Intangible) Acquired Contract Rights Useful Lives Rights under Licensing Agreement & Software Licenses 03 -12 Years Lower of License Period & 2-5 Years Customer-Related Intangibles 03 Years Straight Line Method of Depreciation – Under the straight-line method (also known as Equal Installment Method), the depreciable cost of the asset is proportionately allocated as expense against the revenues during each year of the useful life of the asset. The accumulated depreciation will be increasing annually, at a uniform rate, becoming equal to the depreciable cost of the asset at the end of its useful life.
